AMY » Topics » Portfolio of Irreplaceable Corners

This excerpt taken from the AMY 10-Q filed May 15, 2009.

Portfolio of Irreplaceable Corners

Our core portfolio consists of Today’s Irreplaceable Corners™. These are corner properties in Top U.S. Growth Markets with the following characteristics:

 

 

 

 

Located on a corner in major metropolitan area

 

High barriers to entry

 

High daytime and evening population

 

High count of cars per day

 

High average household income within 3-5 mile radius

As of March 31, 2009, we owned a real estate portfolio consisting of 45 properties located in 15 states. Leased to national, regional and local tenants, our properties are primarily located throughout Texas. We are currently focused in three of the top six population and job growth markets in the United States: Houston, Dallas and San Antonio. Our long term goal is to have a presence in six of the top ten population and job growth major markets in the United States. As owners of real estate, we implement high standards of excellence in maintaining the value, aesthetics, tenant mix and safety of each of our properties. As of March 31, 2009, our operating properties are leased at 91.5% based on leasable square footage compared to 98.4% as of December 31, 2008.

Selecting properties with high quality tenants and mitigating risk through diversifying our tenant base is at the forefront of our acquisition and leasing strategy. We believe our strategy of purchasing premier retail properties in high-traffic, highly-populated areas should produce stable earnings and growth opportunities in future years. We continually monitor the sales trends and creditworthiness of our tenants. Our acquisitions program is sensitive to changes in interest rates. As of March 31, 2009, 74% of our outstanding debt had a long-term fixed interest rate with an average term of 6.2 years. Our philosophy continues to seek to match long-term leases with long-term debt structures while keeping our debt to total assets (at fair value) ratio less than 55%.

Advisory Business
For 25 years, we have created financial solutions for our investors by offering real estate investment opportunities as a stable and dependable source of income and portfolio growth. We have successfully advised 17 private and public investment vehicles over the past two and a half decades that have led to the acquisition, development and redevelopment of Tomorrow’s Irreplaceable Corners™ properties throughout the United States. Tomorrow’s Irreplaceable Corners are properties that are located on dominant regional intersections within fast growing markets. AmREIT creates value for its clients and investors through its expertise in development, redevelopment and daily operation of these properties.

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Table of Contents

The advisory business invests in and actively manages six merchant development partnership funds, which were formed to develop, own, manage, and add value to properties with an average holding period of two to four years, and in REITPlus. We invest in the limited partnerships we manage as both the general partner and as a limited partner, and, in REITPlus, we have invested as a limited partner in its operating partnership. Our advisory business sells interests in these funds to retail investors. We, as the general partner or advisor, manage the funds and, in return, receive management fees as well as potential profit participation interests. However, we strive to create a structure that aligns the interests of our shareholders with those of the investors in our managed funds. In this spirit, the funds are structured so that the general partner does not receive a significant profit until after the limited partners in the funds have received or are deemed to have received their targeted return, therefore linking our success to that of the investors in our managed funds. Within our asset advisory business we manage an additional $259 million in assets, representing 27 properties, all located in Texas, and equity under management within our advisory business has grown from approximately $15 million to approximately $172 million. We also manage an additional $214 million in institutional assets under management, and $70 million of institutional equity under management.

Real Estate Development and Operating Group
Our real estate operating and development business is comprised of a fully integrated real estate team that works directly with landlords, builders and developers. This team is primarily focused on managing, leasing and creating value on our owned and managed portfolio of Irreplaceable Corners and gives us a competitive edge on pricing and development opportunities. Having a full complement of real estate professionals helps secure strong tenant relationships for both our portfolio and the merchant development portfolios managed by our advisory business.

This excerpt taken from the AMY 8-K filed Nov 5, 2008.

Portfolio of Irreplaceable Corners

As of September 30, 2008, AmREIT owned 48 properties, with approximately 96% of its rental income coming from properties located in the major Texas metropolitan markets of Houston, Dallas, San Antonio/Austin. These three markets are ranked in the top 7 in the U.S. for job and population growth.

The portfolio generated $7.5 million in total revenue during the third quarter of 2008 and 2007. After expenses and allocation of dividends paid on the Company's non-traded shares, the segment reported a net loss of $515,000, or ($0.10) per class A common share, and FFO totaling approximately $379,000, or $0.07 per Class A common share, for the quarter.

This excerpt taken from the AMY 8-K filed Aug 6, 2008.

Portfolio of Irreplaceable Corners

As of June 30, 2008, AmREIT owned 51 properties, with approximately 95.9% of its rental income coming from properties located in the major Texas metropolitan markets of Houston, Dallas, San Antonio/Austin. These three markets are ranked in the top 7 in the U.S. for job and population growth.

The portfolio generated $8.2 million in total revenue during the second quarter of 2008, up 7.9% compared with $7.6 million generated for the same period in 2007. The increase in revenue is primarily due to the increased leasing spreads on lease renewals and increased CAM recoveries based on increased portfolio costs. This was somewhat offset by a $142,000 impairment related to our 584 Germantown Parkway property that sold on July 11, 2008 (which is part of the $926,000, net of taxes, total impairment). After expenses and allocation of dividends paid on the Company's non-traded shares, the segment reported a net loss of $2.1 million, or ($0.36) per class A common share and FFO totaling approximately $561,000, or $0.10 per Class A common share, for the quarter.


This excerpt taken from the AMY 8-K filed May 7, 2008.

Portfolio of Irreplaceable Corners

As of March 31, 2008, AmREIT owned 50 properties, with approximately 97.3% of its rental income coming from properties located in major Texas metropolitan areas.

The portfolio generated $7.8 million in total revenue during the first quarter of 2008, up 9.8% compared with $7.1 million generated for the same period in 2007. The increase in revenue is a result of increased leasing spreads on lease renewals, and improved occupancy across the portfolio. After expenses and allocation of dividends paid on the Company's non-traded shares, the segment reported a net loss of $1.1 million, or ($0.18) per class A common share and FFO totaling approximately $763,000, or $0.13 per Class A common share, for the quarter.

This excerpt taken from the AMY 8-K filed Aug 8, 2006.

Portfolio of Irreplaceable Corners

2nd Quarter Financial Update

$8.5 Million in Revenues

 

 

 

Includes $450,000 – lease termination fees

 

 

 

 

Offest by:

 

 

 

 

 

$2.1 million – property expense

 

 

 

 

 

 

$2.4 million – depreciation

 

 

 

 

 

 

$1.8 million – interest expense

 

 

 

 

 

 

$500,000 – G&A

 

 

 

 

 

 

$2.9 million – dividend allocation

 

 

 

 

Net Loss = $1.2 Million

 

 

 

 

Generated $0.15 FFO/share*

 

 

 

 

Projected to contribute $0.56 - $0.59 in FFO for 2006

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++It All Adds Up++

This excerpt taken from the AMY 8-K filed May 4, 2006.

Portfolio of Irreplaceable Corners

Our portfolio acts as the primary source of recurring income to our business model, contributing approximately 58% in total revenues, and consists of premier retail properties typically located on “Main and Main” intersections in high-traffic, highly populated affluent areas.  As of March 31, 2006, we owned 49 properties, with approximately 84% of our rental income coming from properties located in major Texas metropolitan areas.  82% of the portfolio consists of multi-tenant, grocery anchored and lifestyle shopping centers.  The remaining 18% comes primarily from single tenant, parent company guaranteed leased properties.

The portfolio generated $6.8 million in operating revenue during the first quarter of 2006, up 51% as compared to the $4.5 million generated for the same period in 2005.  We anticipate this business to generate total 2006 operating revenues of $33 million, a 44% annual increase over 2005.

Expenses associated with our portfolio were approximately $5.4 million, comprised of $1 million in property expenses, $2.2 million in depreciation and amortization, $1.6 million in interest expense and $633,000 in general and administrative expense.  Revenues were further reduced by $2.9 million due to the allocation of dividends from our non-traded shares on a pro-rata basis based on net income contribution of the segment, resulting in a net loss to our Class A common shares of $1.5 million.

FFO contributions from the portfolio totaled approximately $652,000 or $0.10 per Class A common share for the quarter.  Anticipated FFO available to Class A common shares for 2006 from this segment is budgeted at $0.56 to $0.59 per share, or approximately 81% of total 2006 FFO.  We believe this is a recurring and dependable income stream that will support the monthly dividends, and we strive to have the portfolio cover 100% of the dividends paid to all classes of common shares.

Our overall occupancy as of March 31, 2006 was approximately 94.7%.

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AmREIT updates annual earnings guidance on a quarterly basis. 

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